Growth ahead for mobile ads

Mobile advertising and “m-commerce" will be among the fastest growing segments of Australia’s media and entertainment landscape in the next four years, a study by PwC has found.

Revenues from mobile advertising remain modest with many websites still not optimised for mobile devices. Just $14 million was spent in the segment in 2011.

But PwC predicts mobile advertising spending will achieve compound annual growth rate of 46 per cent over the next four years, to reach $90 million by 2016.

That compares with a compound annual growth rate of 10.3 per cent for the total internet market, which is expected to reach $14.9 billion in 2016.

Based on figures compiled by US-based digital advertising provider MediaMind, the report says mobile banner advertisements now deliver higher click-through rates, at 0.61 per cent, than those from browser banners, at 0.07 per cent.

Fresh opportunities beyond banner advertising are also emerging, the report says, including initiatives more closely integrated with marketing.

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“Although smartphone growth rates are expected to slow as the market base gets bigger, PwC predicts that m-commerce growth will continue to be rapid as consumer confidence and usage increases and the m-commerce ecosystem improves," say two of the report’s authors, Megan Brownlow and David Wiadrowski.

Global “m-commerce" is expected to achieve a compound annual growth rate of 39 per cent over the next four years, reaching a total of $US31 billion by 2016. PwC says the adoption of m-commerce – the amount of transactions conducted through mobile devices – is “already accelerating ahead of global trends".

One key battleground in the m-commerce sector will be mobile payments. Traditional payment providers such as banks and credit card providers are expected to face strong challenges from other companies that have billing relationships with mobile customers, including telecommunications carriers and technology companies such as Apple and Google.

As a result, PwC expects growth in m-commerce to be closely scrutinised by regulators including the Reserve Bank, of Australia the Australian Communications and Media Authority and the Australian Payments Clearing Association,

“Mobile payments are likely to get a great deal of attention and the question remains as to how they should be regulated," the authors says.

But PwC says the variety of competing mobile payments systems is leading to confusion, and consolidation will be needed. “For mobile payments and the mobile wallet to be successful, consumers need fewer choices and a simple end-to-end experience they can trust."